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GENERAL.
If the general lines of Lord Morley's Award be disturbed, the Imperial Post Office submits (1) that the relief accorded to India under paragraph 9 (6) of the A ward should not be extended to Colonies so intimately concerned in regular communication with China as Hongkong and the Straits Settlements, and (2) that Ceylon should be assessed with her share of the loss in respect of her mails conveyed by packets of the Orient Company.
General Post Office, London,
7th November, 1904.
H. BABINGTON SMITH.
Appendix VIII.
REPLY TO POST OFFICE REJOINDER.
(The purport of this reply was presented verbally to Lord Balfour of Burleigh on 21st November 1904.)
INCLUSION OF AUSTRALIAN SERVICE IN THE ASSESSMENT.
The facts appear to be as stated by G. P. O., but the Eastern Colonies under Paras. 1, 2 the old contracts had never accepted the G. P. O.'s proposals for apportioning the and 8.
cost.
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The view that £85,000 is not a fair estimate of the Australian share of the subsidy receives confirmation from the annexed copy of a letter from the Orient Steam Navigation Company which has been communicated to the Colonial Office since the above was written and from which it appears that that Company had decided that £85,000 was not a sufficient subsidy for their service and had asked for £150,000 a year on the expiration of the present contract claiming that that sum calculated ou a mileage basis is equivalent to the subsidy received by the P. and O. Company.
A comparatively smaller sum for the Australian mails was in all probability originally asked for by the P. and (). Company because there was a competing line. Practically there was no competition for the combined Indian and China mail.
If the Colonial Office contention, that Australia should be assessed on the Para, 4, same lines as India and the Eastern Colonies, is accepted, the Colonial Office would not object to the suggestion that Ceylon should bear. her share of the loss on the Orient Company's service calculated as in Lord Morley's award, in lieu of paying sea postage on mails sent from Colombo to England.
N.B.-This would cease on 31st January 1905, as the Orient Company's contract has not been continued beyond that date.
QUESTION OF SPEED.
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The calculations in Appendix G. did not "veil the fact that the Eastern Para. 1. Colonies benefit" by a higher speed over the earlier sections of the service, but charged each of the Eastern Colonies its share of the extra cost of those sections, assumed to be due to extra speed, and thus with strict mathematical accuracy compared like things with like.
The letter here quoted does not affect the argument that the greater speed on Para, 2. the earlier sections as compared with the later can only be obtained by a greater consumption of coal. The fact that the Company has obtained an increase of £10,000 a year on the extended contract in return for increased speed, illustrates the point.